Jesse Coghlan7 hours agoCryptojacker conned $3.5M from cloud firms to mine crypto, feds allegeProsecutors claim the “cryptojacking” scheme stole cloud computing resources to mine nearly $1 million worth of crypto.869 Total views1 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksUnited States prosecutors have charged a man with wire fraud and money laundering charges after he allegedly defrauded two cloud computing providers to run a “large-scale illegal ‘cryptojacking’ operation” — with the perpetrator facing up to 50 years in prison.
The Brooklyn U.S. Attorney’s Office on April 15 claimed Charles O. Parks III, also known as “CP3O,” defrauded the two companies of $3.5 million to mine $970,000 in cryptocurrencies, including Ether (ETH), Litecoin (LTC) and Monero (XMR) using the two firm’s resources without paying.
Cryptojacking is when an entity uses resources such as computing power or electricity without permission to mine crypto. Types of malware can inject software to mine crypto that drains a small amount of resources from a network of computers.
Parks was arrested in Nebraska on April 13 and charged with wire fraud, money laundering and engaging in unlawful monetary transactions.
He faces a combined maximum sentence of 50 years in prison and is slated to appear before an Omaha federal court on April 16.
The indictment alleged Parkes created multiple accounts with a subsidiary of “Company 1,” a “cloud computing and consumer electronic device headquartered in Seattle, Washington,” and “Company 2,” a firm that makes “personal computers and related services headquartered in Redmond, Washington.”
From around January to August 2021, Parks allegedly used multiple fake “names, corporate affiliations and email addresses,” including from companies he registered — MultiMillionaire LLC and CP3O LLC — to make accounts at the companies.
He then “tricked and defrauded” the services into “approving heightened privileges and benefits, including elevated levels of cloud computing services and deferred billing accommodations,” the indictment alleges.
Parkes deflected when the providers started inquiring about “questionable data usage and mounting unpaid subscription balances,” prosecutors claimed.Highlighted excerpt of the indictment against Parkes. Source: U.S. Attorney’s Office
The indictment claims Parkes laundered some of his mined crypto through “Cryptocurrency Exchange 1,” which “bills itself as a ‘decentralized company, with no headquarters.’”
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Other funds were allegedly laundered through a payments provider, bank accounts and a New York City-headquartered nonfungible token (NFT) marketplace.
He structured the payments in a bid to avoid the $10,000 minimum transaction reporting requirements under federal law, the indictment said. Prosecutors claimed to have found multiple instances of Parkes moving $9,999 and smaller amounts from the crypto exchange to a bank account.
Prosecutors alleged Parks used the proceeds for “extravagant purchases,” including a luxury Mercedes Benz, jewelry and “first-class hotel and travel expenses.”
Brooklyn U.S. Attorney Breon Peace said in a statement: “This Office will continue to prioritize prosecuting criminal actors who use new, sophisticated technology to engage in the old scheme of fraud and deceit.”
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